Pound gains value while dollar falls

The pound saw a rise in value this week after Brexit secretary David Davis said the UK could retain single market access after leaving the European Union (EU).
 
Meanwhile, the euro and the US dollar have both lost value. Elsewhere, the Turkish lira continues to fall.
 
GBP
 
Investors are viewing the pound with a bullish stance after it was revealed that the UK could potentially retain access to Europe’s single market after it leaves the EU.
 
The pound rose in value against the euro after Brexit secretary David Davis said that the government would consider making payments to the EU to secure access to the single market. He also said that freedom of movement would not be ended in a way that damaged UK businesses.
 
Sterling also rose to a four-week high against the US dollar after Mr Davis’ announcement.
 
Investors are now expressing interest in the pound, which analysts think could potentially raise its value even further.
 
EUR
 
The euro has suffered its worst performance against the pound in 11 weeks. The  euro has been subdued for many weeks as investors express anxiety over upcoming elections.
 
Concerns about political stability within the EU are affecting the euro, which has seen it lose value against the US dollar.
 
On 4 December, Italians will vote in a constitutional referendum that could see voters reject the prime minister’s suggested reforms. Matteo Renzi wants to remove power from the Senate, which would result in proposed laws only needing approval from the lower house of parliament rather than both houses. Mr Renzi has said he would resign if he was defeated.
 
Austria is due to hold its second round of voting in the presidential election on the same date. It could see the far-right Norbert Hofer appointed to the role, which could be a shock to the Austrian and EU systems.
 
USD
 
The US dollar has fallen against most major rivals this morning (2 December), losing some of the value it gained after Donald Trump was elected president in November. It comes ahead of the release of US monthly non-farm payroll data.
 
The greenback lost some of its value against Asian emerging currencies, giving China’s yuan the chance to post its best week in over four months.
 
Some analysts have said that the dollar’s gains in the wake of the election were excessive and that it is now correcting to expected levels.
 
TRY
 
This week, the Turkish lira dropped to record lows against the dollar and the euro, following a poor performance this year.
 
The country’s central bank is now under pressure to act. Last week, the bank increased interest rates but it failed to have a significant impact on the lira.
 
Analysts have blamed Turkey’s unstable political situation and weak economic situation for the lira’s low value.